Kenya Railways paid RVR Sh416.9 million following the uprooting of the Nairobi-Nakuru railway line in April 2009 and the post-election violence in 2007.
In its 21st report on the audited books of accounts for State corporations, PIC says RVR demanded compensation of Sh416,886,673 described as extra-ordinary expense for settlement of a political risk event in line with the concession agreement.
Traders from neighbouring Uganda and Rwanda are still chasing a Sh4.75 billion claim for losses incurred during the post-election violence relating to goods that were being transported through Kenya.
Atanas Maina, the Kenya Railways managing director, told PIC that the concessional agreement stipulated among other terms, the rights and obligations of the parties.
Auditor-General Edward Ouko has questioned Kenya Railways’s decision to pay Rift Valley Railways (RVR) Sh416.9 million for damage of tracks during the 2007 post-election violence and slum protests against disconnection of illegal power lines in 2009.
Mr Ouko says the basis of the claim and calculation of payments to RVR, from a fund set up for standard gauge railway (SGR) feasibility studies, remain unclear.
“Although evidence available indicates that the Treasury approved full settlement from the fund earlier earmarked for standard gauge railway feasibility studies, the basis of claim and how the payment of Sh416,886,693 was calculated and arrived at remained unclear by June 30, 2015,” Mr Ouko told the Public Investments Committee (PIC) during the scrutiny of the corporation’s books of account for the year to June 2015.
Kenya Railways paid RVR Sh416.9 million following the uprooting of the Nairobi-Nakuru railway line in April 2009 and the post-election violence in 2007.
In its 21st report on the audited books of accounts for State corporations, PIC says RVR demanded compensation of Sh416,886,673 described as extra-ordinary expense for settlement of a political risk event in line with the concession agreement.
“The committee observed that the corporation incurred expenses in respect of settlement of political risk claims by the Rift Valley Railways following the uprooting of sections of the Nairobi–Nakuru railway line in April 2009 and political disturbances in 2007 for restoration of works undertaken pursuant to the contract on the conceded assets,” Adan Keynan, who chairs PIC, said.
Ethics and Anti-Corruption Commission’s investigations into claims that the Sh700 million set aside to conduct feasibility studies for SGR had been misappropriated found that it had been redirected to settle the claim that had been outstanding for more than five years.
The claim was related to damages caused on the rail during post-election violence and the estimated loss of business over the period.
The SGR feasibility studies were later conducted by the Chinese government for free.
Traders from neighbouring Uganda and Rwanda are still chasing a Sh4.75 billion claim for losses incurred during the post-election violence relating to goods that were being transported through Kenya.
Atanas Maina, the Kenya Railways managing director, told PIC that the concessional agreement stipulated among other terms, the rights and obligations of the parties.
